Benchmarks ended in the red for the fifth consecutive day after fears intensified that U.S lawmakers may not be able to seal a deal on the Fiscal Cliff issue before January 1. The Dow Jones logged its longest five-day decline since July. Meanwhile, the pending home sales index jumped to its highest level in two and half years. All ten of the S&P 500’s industry groups closed in the red and the energy sector emerged as the biggest loser.

The Dow Jones Industrial Average (DJI) lost 1.2% to close the day at 12,938.11. The Standard & Poor 500 (S&P 500) shed 1.1% to finish Friday’s trading session at 1,402.43. The tech-laden Nasdaq Composite Index slipped 0.9% to end at 2,960.31.The fear-gauge CBOE Volatility Index (VIX) jumped a whopping 16.7% to settle at 22.72. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 4.46 billion shares, considerably lower than the daily average of 6.48 billion shares. Declining stocks easily outpaced advancers on the NYSE; as for 66% stocks that fell, only 31% stocks moved higher.

Benchmarks opened lower on Friday and were in negative territory throughout the day. But losses accelerated before the closing bell after President Barack Obama refrained from making any fresh proposals on the Fiscal Cliff issue when he met Congress leaders. Investor apprehensions about the Fiscal Cliff issue had dragged the benchmarks lower in the previous week, overshadowing a number of encouraging domestic reports. The Dow Jones declined 1.9%, S&P 500 lost 1.9% and Nasdaq shed 2.0% over the week.

President Barack Obama met Congressional leaders on Friday to find a solution to the Fiscal Cliff dilemma before January 1. However, they failed to reach an agreement yet again. President Obama did not offer any new proposals and both Republicans and Democrats were still not ready to compromise. The Fiscal Cliff’s effects will be felt from Tuesday if Congress fails to resolve the issue before the deadline.

After the meeting with Congressional leaders President Obama said: “I’m modestly optimistic that an agreement can be achieved. Nobody is going to get 100 per cent of what they want, but let’s make sure that middle-class families and the American economy — and, in fact, the world economy — aren’t adversely impacted because people can’t do their jobs.” The House will meet again on Sunday evening in a final effort to resolve the Fiscal Cliff dilemma.

Investors once again ignored another promising report from the housing sector. According to the National Association of Realtors, pending home sales increased in November for the third consecutive month. According to the report, pending home sales index increased 1.7% to 106.4 in November from the revised October figure of 104.6. This is below the consensus estimate of an increase of 2.0%. According to Lawrence Yun, chief economist of NAR, “Even with market frictions related to the mortgage process, home contract activity continues to improve. Home sales are recovering now based solely on fundamental demand and favorable affordability conditions.”

Meanwhile, the Chicago business barometer increased in December to 51.6 from November figure of 50.4, beating consensus estimates of 51. According to the report the Chicago business barometer received a boost from an increase in New Orders. However, five out of seven business activity indexes decreased in December. Additionally, the Employment index has touched its lowest level in three years.